CEREAL NUMBERS

RICHARD TURCSIK

To fortify sales in the children's cereal section, retailers are stepping up their advertising and seeking more joint promotions with manufacturers.

Cereal boxes with psychedelic wrappers and toys, games or gadgets inside are predicted to be the fastest sellers, especially when they are advertised on Saturday morning or weekday afternoon cartoon shows, retailers report. Cereals based on the latest blockbuster hit or hot toy also sell well, at least for a limited time, retailers find.

"Promotion is the key to selling all ready-to-eat cereal, and children's cereal is no different," said Gary Evey, a spokesman for Spartan Stores, the cooperative wholesaler based in Grand Rapids, Mich., which is currently undertaking a category management study of the cereal aisle.

Ronnie Brennan, category manager at Randalls Food Markets, Houston, said manufacturer support is imperative if the children's cereal category is to continue to grow.

"A lot of the purchases for kids are based on what they see on television. Parents are still going to be the gatekeepers, but if you have the kids shouting that they want a Cap'n Crunch or Fruity Pebbles, chances are the kids will get their way," Brennan said.

"When we get a couponing event from a General Mills or a Kellogg's we definitely see a bump in the sales," said Emil Oles, category manager at Genuardi Family Markets, Norristown, Pa.

Cheryl Robertson, regional communications manager for Supervalu's Northeast Region, New Stanton, Pa., said buy-one, get-one-free offers work best at driving children's cereal sales.

"But BOGOs currently are not the chosen vendor promotional activity," she added, noting that while in-store displays help to build sales, they are not as important as ad features, which help attract shoppers. Supervalu's Northeastern Region is just beginning to implement a category management program, she added.

John Corcoran, category manager for Big Y Foods, Springfield, Mass., said the best way to promote children's cereals is to use multiple price sales and in-ad sales.

"We merchandise our children's cereals that are featured on endcap displays and wings; we also line them along the bottom shelf for little eyes and little hands," he said, adding that category management is helping to boost sales.

Despite the push toward all-natural granola, multigrain and other better-for-you type products, children's cereals are still the aisle's most powerful brands. According to Information Resources Inc., Chicago, for the 52-weeks ended Nov. 2, 1997, five children's cereals made the Top 10 brands, including Kellogg's Frosted Flakes, Fruit Loops and Rice Krispies, and General Mills' Honey Nut Cheerios and Lucky Charms products.

"During the last quarter, we saw an increase in our children's cereal sales. The movement toward healthy eating has not impacted our sales," Corcoran said.

While most retailers surveyed still merchandise their children's cereals along the bottom shelf by brand, Randalls is toying with the idea of using "subcategory sets" that would group all the children's cereals together in one easy-to-shop department. As reported, it is a tactic that Spokane, Wash.-based Rosauers Supermarkets has already instituted with promising results.

Although children's cereals are still grouped by brand family at Randalls, Brennan said the chain has already broken the category down into "true kids" -- the presweetened items, like Cap'n Crunch; and "better-for-you kids" -- which includes items like Honeycomb, Kix, Alpha Bits and other items that have less sugar.

"The good thing with kids cereals is that there are always promo offers on the packages. And if they see that, and the kids want it, they might grab an extra box and expand their consumption," Brennan said, noting that a regular Cap'n Crunch consumer may also pick up a box of Trix.

Retailers hope they will also pick up a box that is based on a hit movie, TV show or toy as well. Fad items are key to building ancillary sales in the department, although rising marketing costs, licensing fees and industry consolidation have reduced the number of fad items hitting the shelves, according to Brennan.

Corcoran of Big Y said fad items like Jurassic Park and Batman cereals help build profits in the category.

"The buyers of mainstay brands, like Lucky Charms, still buy those items, but they will make additional purchases of the fad items," he said.

"Fad items are important to get into when first introduced and advertised. But they quickly become slow movers after the event they are targeted toward becomes dated," said Robertson of Supervalu.

Robertson's views were echoed by Peter Jost, head buyer of grocery for Harps Food Stores, Springdale, Ark.

"The fad items provide a short-term minor boost. The last theme cereal we did was Jurassic Park. It did OK to start out with, but with the fad and theme cereals it is a very short window that you are dealing with; they become dated very quickly," he said.

Jost said his chain supplements its children's cereal sales by offering private-label versions of the most popular national brand lines.

"Private-label items continue to do well in this area. In most instances, they offer us better margins," he said.

Genuardi's and Randalls also do well with private-label cereals in their respective suburban Philadelphia and Texas markets.

"We have some knockoffs that would coincide with Trix, Frosted Flakes and Lucky Charms. They are doing well and hold their own, but the bulk of the business is still where the advertising is," said Oles of Genuardi's.

Brennan of Randalls said in recent years his private-label children's cereal sales have steadily increased.

"We have had a big emphasis on all our private-label cereal. We have promoted them a lot more than we have in the past," he said.

Brennan said Randalls has also had success with club packs of national-brand cereals, such as a three-box shrink-wrapped package of Kellogg's Frosted Flakes, Kellogg's Cocoa Frosted Flakes and Kellogg's Honey Crunch Frosted Flakes.

"We sell those as a bundle and it brings up your retail, which is great for us. People don't get tired because there is variety," he said. "These club packs have been expanded to the grocery class of trade, and while we don't stock them every day, when we do they are merchandised from sidestack or endcap displays, depending on the store and volume," he said, noting that is how he also merchandises the fad items.